Indian consumption stocks will continue to remain a focus area for investments this year, according to Kotak Mahindra Asset Management Company.
All numbers reflecting consumption, from air traffic to consumer durables and automobile sales, are showing strong growth, Harsha Upadhyaya, the chief investment officer in charge of equities, told BloombergQuint in an interview.
Earnings growth in the current financial year is likely to fall well short of the 22-23 percent consensus estimate, Upadhyaya added. "Overall earnings growth will be in double digits, but won’t touch the 22-percent mark."
It will largely depend on how the banking sector and the telecom sector...some of the sectors which have been really dragging earnings, behave in FY19. We don’t have much confidence in those segments.Harsha Upadhyaya, CIO-Equities, Kotak Mahindra AMC
Here are the other highlights from the conversation:
- Surge in global yields and crude oil rally are red flags to watch out for.
- Hardening of yields to have negative impact on banks and non-banking finance companies.
- Expect valuations to sustain for retail-facing private banks.
- Revenue growth visibility exists in the information technology sector.